SDA retires Rs 28.71 million KP finance department loan

Sarhad Development Authority (SDA) has prematurely retired a loan of Rs 28.71 million loans and disposed of all credit facilities it had availed for various development projects since 1972. Sources in the authority told Business Recorder that the Chairman, Sarhad Development Authority (SDA), had already sanctioned repayment of Rs 28.71 million to the Department of Finance, Khyber Pakhtunkhwa.
The authority was established for industrial development and economic activities in the province and had borrowed loans to the tune of Rs 350 million since 1990s onward from the provincial government for different development projects in the province.
The authority had been paying instalments of the loans to the Finance Department without following the schedule that caused substantial increase in its total liabilities and piling up of the interest.
In July last year, the authority took up the matter of disposing off all the liabilities with Finance Department, which agreed to waive off the interest on these loans, if the authority clear all the existing liabilities that were Rs 128 million at that time.
The authority paid Rs 100 million to the Finance Department, leaving Rs 28.71 million in balance. The official explained that as many funds of the authority are maturing in this week, the final tranche of Rs 28.71 million has been approved to be transfered to the Finance Department.
The policy of premature debt servicing in the public sector was first introduced in the Khyber Pakhtunkhwa in 2002, when the provincial government started retiring expensive Cash Development Loans (CDL) of the federal government.
This policy was carried forward by all the successive governments and so far loans around Rs 10 billion had been retired that created fiscal space and prevented further piling up of these loans on account of high mark up rates.
With the premature retirement of loans the SDA has become the first government agency that had retired all the loans it had taken from the provincial government for different projects before its schedule and had sought remission of mark up that ranged over 15 per cent at the moment.
The authority was expecting revenue generation worth Rs 40 million by next couple of weeks from different sources. These include Rs 12.6 million from District Revenue Officer Swabi, Rs 17 million from Pakistan Stone Development Company and Rs 10 million as remaining privatisation proceeds of Khazana Sugar Mills. The authority was intending to utilise such funds for execution of different revenue earning projects in the province.